Cameco (CCJ) Q2 2016 Earnings Call

posted in: Earnings Call, Notes | 0

Cameco (CCJ) CEO Tim Gitzel said this is the worst market for uranium he’s seen in a decade

“I think I can say that, Q2 2016 has probably been the toughest quarter in the toughest market we’ve seen in the last decade. And our results for the quarter reflect just our challenging in the market environment where our industry continues to be. Uranium demand remains low and uranium prices depressed.”

He doesn’t see the lack of demand for the product ending anytime soon

“In the second quarter, the market remain quiet with with contracting volumes even lower than last year at this time. As a result, we saw both the spot and long-term uranium prices fall to new 10-year lows. In fact, the spot price for uranium has fallen 66%, since the Fukushima accident, including a 25% decrease since last year at this time. It’s not difficult to see wide, there has been no real catalyst to kick start a significant change to the current conditions.”

Supply for uranium currently exceeds demand 

“Consequently, there has been no change in the number of operating reactors in Japan since the first quarter. And as long as the bulk of their reactors remain shutdown, uranium inventories continue to grow. This at a time, when demand is lower overall and supply continues to perform well. Add to this the announcement, so premature reactors shutdowns mainly in the United States, which is also adding extra pressure to the supply demand equation.”